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Strategy as Simple Rules HBR OnPoint Enhanced Edition

4 stars (Simple rules instead of positioning and core competencies?!?) - Harvard Business Review article, published in the January 2001 issue, by Kathleen Eisenhardt, Professor of Strategy and Organization at Stanford University, and Donald Sull, Assistant Professor at Harvard Business School. The authors start the article with describing the success story of Internet portal Yahoo! Some critize Yahoo for lacking a strategy altogether, but according to the authors Yahoo follows 'strategy as simple rules'. Strategy as simple rules and its underlying logic of pursuing opportunities are harder to see than traditional approaches. The authors compare the logic, steps, source of advantage, risks and performance goals between Michael Porter's positioning school, Hamel & Prahalad's competence/resource-based management, and 'strategy as simple rules', which works best in rapidly changing, ambiguous markets. "Managers using this strategy pick a small number of strategically significant processes and craft a few simple rules to guide them. The key strategic processes should place the company where the flow of opportunities is swiftest and deepest." The authors provide a useful table summarizing the types of simple rules for the different aspects of seizing opportunities (how-to, boundary, priority, timing, and exit rules). It is important that managers use the right number of rules, which should be between two and seven. Too few rules can result in ineffective execution of innovative ideas, too many rules can keep organization from competing effectively in turbulent markets. So where do these rules come from? In most cases, they grow out of experiences, especially mistakes. The authors use Yahoo!, Cisco, and Enron as examples. I had mixed feelings about the previous three HBR articles I read by Eisenhardt. However, I was looking forward to this article since the authors take on one the most daunting tasks in the field of strategic management: complementing Michael Porter's posi...
Harvard Business Review :: General :: Business & Economics & General :: Business & Economics :: Donald Sull :: Kathleen M Eisenhardt :: :: Strategy as Simple Rules (HBR OnPoint Enhanced Edition)